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Shell Says It Wins Appeal on Alberta Oil Sands Mines

By Joe Schneider

Aug. 28 (Bloomberg) — Shell Canada Ltd. said a regulatory agency’s approval of two oil sands mines in Alberta was upheld by an appeals court judge who rejected an environmental group’s request for a new hearing on the projects.

Alberta Court of Appeal Judge Bruce MacDonald yesterday upheld two rulings by the Energy Resources Conservation Board, the provincial energy regulator, denying a request to re-examine approvals of Shell’s Jackpine Mine and expansion of the Muskeg River Mine oil sands project, the company said in a statement.

The Oil Sands Environmental Coalition, or OSEC, which includes the environmental policy researcher Pembina Institute, asked the board for new hearings in April, claiming Shell failed to abide by a voluntary pollution-reduction agreement that it signed with the environmental group. The board denied the request and the group appealed.

Shell, a unit of Royal Dutch Shell Plc, feels “strongly that our compliance with CO2 regulations will fulfill the spirit and intent of our agreements with OSEC,” John Abbott, Shell’s executive vice president of heavy oil, said in the statement.

MacDonald said in his ruling from the bench that the energy board’s decisions were based on a reasonable exercise of its discretion and the threshold for an appeal wasn’t met, according to Shell. The judge didn’t put his decision in writing, Philip Vircoe, a Shell spokesman, said today in a phone interview.

‘End of the Road’

“This is the end of the road for our legal options,” said Dan Woynillowicz, a policy analyst at the Pembina Institute. The environmental group will stop negotiating directly with oil companies and instead bring its concerns to the regulatory board from now on, Woynillowicz said.

“It’s more adversarial and more costly,” he said, adding the energy board had encouraged groups to negotiate directly with the companies to reduce the length of hearings and cut costs.

Shell had promised to bring pollution from oil sands mines in line with alternatives available in North America, reducing carbon dioxide emissions by 900,000 tons a year — the equivalent of taking 200,000 cars off the roads, the environmental group said.

The Muskeg River oil sands mine and the Jackpine Mine are about 70 kilometers (44 miles) north of Fort McMurray in northern Alberta.

To contact the reporter on this story: Joe Schneider in Toronto at [email protected].

Last Updated: August 28, 2009 16:27 EDT

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